A new economic paradigm

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Effects

Built-in carrots and sticks

In the same way that NPV index can be increased by contributory behavior, it is decreased by negative activity, or what we will call costs, social and environmental deficits. The system allows for crime, transgressions and social pathology to be automatically reflected in lower NPV overall, resulting in a lower index and associted access for the offending parties; non-custodial sentences and judicial fines are automatically reductive. Incentives and disincentives are built into the system making many laws and regulations obsolete or unnecessary. The rating of an offending entity will decline until the offence is rectified. Self-correction and improvement similarly will be reflected in an increased NPV rating. It is expected that self-interest will motivate individuals to zealously guard against their rating decline so as not to jeopardize their access to goods and services.

It will be no longer necessary to criminalize substances and activities that now form the economic base for crime syndicates and gangs as the existing medium of exchange loses value. Currently illegal substances and activities like prostitution will be legalized and regulated with access under controlled conditions. Their respective negative and positive contributions to NPV will be assessed and the respective ratings applied to producer and consumer accountities accordingly. Abuse and addiction will be treated as the medical problems they are by universally accessible health care.

The removal of the economic roots of armed conflict will no longer require standing armies or defense systems. Weapons manufacture will be phased out as the negative NPV index will be an automatic disincentive for producers. Positive index ratings can be accrued by sovereign and manufacturing entities dismantling and recycling weapons systems.

At another level, for example, if it is determined that CFL and incandescent bulbs are not as efficient or good for the environment as LED bulbs it will not be necessary to curb or influence consumption patterns by legislation as currently under consideration. The higher NPV rating of the LED bulb will be incentive for manufacturers to shift production to LEDs until the other bulbs disappear from the shelves. Lighting fixture manufacturers will similarly phase out incandescent bases in favor of LED fixtures which will increase their NPV rating. Self-interest will coincide with sustainability. Mere green-washing will be flushed out of the system as NPV indices take hold across the range of products and services. The identical process is applied to everything from surgical developments to energy generation.

To initiate a project or increase capacity, an entity –- village artisan, tech start-up, school, hospital or transit agency –- submits a proposal or business plan up-line to the relevant authority which determines how it contributes to NPV. Approval triggers an immediate increase of NPV of the applicant providing access to resources; whether the project fails, breaks even or is a runaway success is reflected back in NPV adjustments. There is no crippling loan that has to be paid back. The self-balancing system reverts to homeostasis in a pattern reminiscent of the human nervous system sending signals to the brain which responds with the release of peptides that regulate metabolism.

A major part of government activity is currently devoted to shaping their respective economies by arcane and complex systems of regulation and incentives, and bureaucratic red-tape. These will be rendered obsolete and unnecessary by the built-in checks and balances of the NPV system. Fiscal limitations will no longer hamper national or local budgets. The concept of a government shut down because of budgetary constraints, of a super power no less, is ludicrous and will become a source of incredulity for future citizens. National and local governments will be free to focus on well-being, cultural development, and infrastructure maintenance. Too much of a country’s wealth is currently lost through political corruption to enrich dishonest leaders. With no vehicle for the transfer of wealth the occasion will not arise within a moneyless system.

Implications

With no money or currency, there will be no financial fictions: interest, profits, markups, investments, loans, mortgages, derivatives, insurance or prices. This removes market manipulation, insider trading, hoarding and speculation. Highway robbery, literal and figurative, will be severely curtailed. Without a medium of exchange, ransom, fraud, corruption, bribery, extortion and such money-based crimes will diminish. Somalia will have access to resources to support its development while individual Somalis will each receive basic personal support that should tend to nullify the need to prey on marine traffic.

Poverty and homelessness will be voluntary. Each person will have access to essentials of food, shelter, education and healthcare. Anything beyond the basics will depend entirely on the individual’s ability, talent, aptitude and inclination. Access to higher levels of goods and services will remain as incentives for effort, innovation and enterprise. Consumption levels will fall overall as output is constrained within the limits of sustainability. The NPV indexes will bring this about automatically, imperceptibly in the background, without the need for customary interventions like prohibition, rationing, and price or currency adjustments. The invisible (sleight-of-)hand of the market will be replaced by the invisible scales of value scientifically calibrated according to best and most recent information.

The transition to a sustainable society will require the reconstitution and reinvention of households, villages, neighbourhoods, towns, cities and regions everywhere on the planet as interdependent, nested, self-organized, participatory and diversified wholes. […] The result will be a decentralized and diversified structure of everyday life which is in contrast to the centralized and increasingly homogenized structures that we have become accustomed to. […] Reconstituting the Domains is an inherently transdisciplinary and grassroots process that represents an opportunity to reintegrate and recontextualize knowledge, embedding it in both community and everyday life. — Gideon Kossoff1

The ownership of land will be phased out and will accrue to community land trusts. Real estate titles will be converted to titles of occupancy upon the death of the holder, or earlier, and can be transferred or bequeathed to a qualified holder, or assigned to the trust. Many aspects of the realty and property management professions will continue only slightly changed. There just will not be any buying or selling. Developers will submit proposals to build out vacant or underutilized property in the customary manner but now required to meet NPV criteria, far more comprehensive than existing LEED certification. On completion the project is assessed for added value and their corporate account index is adjusted accordingly. The development rights to the property come to an end, and bids are invited for management rights. Individual adults can access single resident accommodation, while incorporated households of two or more adults can access proportionately larger housing by means of their joint accountity.

Access to commercial space is determined by size, volume and nature of business pegged by NPV index. Similarly, access to agricultural land and mining will be based on NPV index of the proposal. By this means, industrial agriculture as currently practiced and mountain top removal for coal would not pass muster. Existing facilities will be phased out as the operating entities undergo declining NPV indices – value becomes cost – a negative index being the non-monetary equivalent of bankruptcy. So the presence of minerals or fossil fuels may not necessarily contribute to a net positive NPV index for an accountity if the extraction process and environmental impact diminish the utility value. Leaving resources untapped may yield a greater NPV index. Moreover, alternatives with greater NPV potential can be readily identified for implementation.

Preliminary work in preparation for managing the commons has already been done by Elinor Ostrom (2008) and others. Of the Design Principles for Common Pool Resources (CPR), the eighth one is particularly applicable to holonic organization: In the case of larger common-pool resources, organization in the form of multiple layers of nested enterprises, with small local CPRs at the base level.

There will be uncertainty and confusion in the beginning as people switch from from one system to the other and back again. Conditioned reflexes and old attitudes will take some time to be outgrown. For one, the concept of affordability will be turned on its head, requiring cognitive adjustment. Only those projects and products of sufficiently high NPV will be “affordable” and therefore pursued or produced. Lifetimes of expectation of payment and obligation to pay are not readily extirpated. However, the intuitive ease of use, homeostatic flow and balance of the system, and sense of rightness will prevail. In time, all will be perceived as the natural order of things.

Much effort has been expended and some small successes won by environmental and sustainability activists in the areas of resilience, regeneration, restoration, localization, degrowth, downshifting and permaculture. The adoption of PI will amplify these efforts by several orders of magnitude, boosting them to the default way-of-life everywhere. Only at this scale and intensity will critical, substantial change come about, making possible the Resource Based Economy envisaged by some grass-roots movements.

Freed from wage slavery and drudgery, people will develop to their highest potential, utilizing available lifelong education and open information. Civilization will not only be saved but will flourish anew.

Implementation

Because of the intensive digital nature of the system, the development follows that of a typical start-up. The scale however is beyond anything that has been done, bigger than Google, Amazon, Facebook and Wikipedia combined. It will be the next big thing. At the same time, there is much to learn from them: Google’s reach and ubiquity, Amazon’s ability to rank millions of units, Facebook’s roll-out and universal acceptance. The necessity for viral adoption is that there is not time enough for an extended public education campaign. Like Facebook, PI will afford immediate benefit to the subscriber, advantages that increase with the accession of each new holon. These benefits may be purely psychological at first, nevertheless as real as the value and appeal of social media. As materials, goods and services come on stream, those benefits will become increasingly tangible. A beta release will be limited in reach and efficacy but will present opportunities to work out kinks and refine algorithms. As critical mass is achieved, there will be no turning back, and indicators of environmental health and human well-being consequently will improve.

Much of the data is already available and accessible in aggregate as well as direct feed. To extend and amplify this we will need to “place sensors and bots in-and-across all networks, sensors that collect big, head-to-toe data dots from the sky, from oceans, rivers, forests, the internet of things, etc. Chunks of that relationship information collection already exist (from) satellites, etc… We can build quantum and other computers that process the relationship data with ever finer resolution.”2

A critical initial factor will be converting existing reserves – food security stockpiles, emergency relief personnel and supplies, peacekeeping forces, housing surpluses – to the PI system, so a rapid start can be made to meet immediate needs of humans in poverty. Philanthropic funds can fund the startup but will become superfluous as the system develops. As producers and suppliers experience comprehensive support from the system, they will in turn contribute to the system.

Early adopters may include:

Bolivia and Ecuador whose national policies embrace sustainability considerations; Bhutan which has recognized happiness in its constitution;

Underdeveloped and developing (in conventional terms) countries which have much to gain as their contribution to NPV will be reflected in increased access to units;

So-called PIGS (Portugal, Ireland, Greece and Spain) who have run out of economic options. Cuba and Venezuela may recognize this as an opportunity to get out of a US-dominated game.

It is unclear whether China, already chafing under a dollar-denominated world economy, has not already gone too far down the capitalist road to abjure the monetary system. There is some talk among Neo-Confucianists of an ethics-based economy.

The emerging democracies of the Middle East, which have suffered extreme income disparity and repression at the hands of autocrats, may be at a critical juncture where they are willing to skip the monetary stage and get a leg up with the New Planetary Vision. Their noble and courageous actions and expression through the Arab Spring would suggest they may be ready for this.